A BILL to amend and reenact section eighteen, article five,
chapter twenty-two of the code of West Virginia, one
thousand nine hundred thirty-one, as amended, relating to
market-based banking and trading; modifying state banking
and trading requirements to comply with federal program
changes.

Be it enacted by the Legislature of West Virginia:

That section eighteen, article five, chapter twenty-two of
the code of West Virginia, one thousand nine hundred thirty-one,
as amended, be amended and reenacted to read as follows: §22-5-18. Market-based banking and trading programs,
emissions credits; director to promulgate
rules.(a) Within one hundred eighty days after the effective date
of this section, theThe director shall propose legislative
rules for promulgation in accordance with article three, chapter
twenty-nine-a of this code, to the full extent allowed by
federal and state law, one or more rules establishing a
voluntary emissions trading and banking program that provides
incentives to make progress toward the attainment or maintenance
of the national ambient air quality standards, the reduction or
prevention of hazardous air contaminants or the protection of
human health and welfare and the environment from air pollution.(b) Any person reducing air emission from a source to a
greater extent than otherwise required by state or federal law
is entitled to an emissions credit in the amount of the excess
emission reduction. The director shall establish a system by
legislative rule for quantifying, verifying, determining
eligibility,and registering, trading and using all emissions
reduction credits, which are eligible for banking and trading if
achieved after the first day of January, one thousand nine
hundred ninety-one, to the extent permitted by federal law.
Credits also shall be available for permanent shutdowns:.Provided, That the credits may be transferred by the depositor
to the state office of economic development or to a public interest group of the depositor's designation. Except for
voluntary reductions of nitrogen oxides, tenTen percent of any
emission reduction credits registered with the director shall be
credited to an account for the benefit of the state and retired
from future use:, if not used within ten years. Provided, That
fifty percent of any emission reduction credits generated from
permanent shutdowns prior to the effective date of the
legislative rule or rules promulgated pursuant to this section
shall be retired from future use. All other emissions reduction
credits registered shall remain in effect until used and debited
or retired,.ifCredits not used within ten years shall be
retired from future use. The director may charge a reasonable
transaction fee at the time any credits are registered and shall
deposit the fees in the air pollution control fund.(c) Emission credits registered by a person in accordance
with subsection (b) of this section may be used by the person to
satisfy emission reduction requirements that would otherwise be
required under state or federal law or the credits may be used
for the same purpose at another source, by the person who
registered the credit or by another person to whom the credit
was transferred. Same source use of banked emission credits
requires prior notification to the West Virginia office of air quality. The rules may not prohibit the transfer of credits
among persons, but shall establish procedures by which transfers
are identified, tracked and accounted for in the program. The
division may establish the emissions trading program as a state,
multistate or regional program as long as the program
contributes to the goal of improving the air quality in West
Virginia and in the air quality region where the source is
located.(d) The director may propose legislative rules for
promulgation in accordance with article three, chapter
twenty-nine-a of this code, establishing classes of volatile
organic compounds, and shall allow banking and trading of
different volatile organic compounds within the same class. In
lieu thereof, trading shall be allowed among all volatile
organic compounds where not inconsistent with federal law and
where similar degrees of hazard and qualitative impact are
anticipated with respect to air quality. For any emissions
banking and trading program used for the purpose of making
progress toward attaining or maintaining the national ambient
air quality standard for ozone, the director may allow
reductions of volatile organic compounds to be substituted for
required reductions of oxides of nitrogen, or reductions of oxides of nitrogen to be substituted for required reductions of
volatile organic compounds, where appropriate, if not
inconsistent with federal law.Strike-throughs indicate language that would be stricken
from the present law, and underscoring indicates new language
that would be added.

The Legislative Rule-making Review Committee recommends
this bill for passage during the 2000 Legislative Session.